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BLM suggests fees to pay for well inspections

The Bureau of Land Management would be better able to keep up with inspections of the nation’s onshore oil and gas wells if Congress would approve a fee system for the inspections, the head of the agency said.

BLM Director Neil Kornze called for the fee system in a speech Thursday to the Rocky Mountain Mineral Law Foundation conference in Vail.

What Kornze said were “irregular and declining budgets” have hindered the agency’s ability to keep up with demands for inspections.

The administration’s 2015 budget proposal will include a fee system “that will allow us to be much more responsive to the needs of industry and, importantly, to meet the foundational safety and accounting responsibilities of our oil and gas program,” Kornze said.

The BLM has enough money to keep up with its inspection and enforcement responsibilities, said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association.

“The agency has plenty of money but chooses to spend it in all the wrong places,” Ludlam said.

Ludlam has previously cited the BLM’s spending to rework leases in Mesa and Garfield counties as “completely unnecessary” and requiring only repair of an administrative error.

“Flagrantly wasteful decisions squander money the BLM simply doesn’t have,” Ludlam said. “As a result, the dollars are being taken from other important resource management programs. The amount of taxpayer money being used to redo this study would likely fund a full-time Western Slope natural gas well inspector for nearly two decades.”

The General Accountability Office has reported that the BLM failed to inspect about 40 percent of high-priority drilling operations between 2009 and 2012, Kornze noted.

The agency, meanwhile, has failed to complete 100 percent of its high-risk production inspections, which Kornze said are “critical for ensuring proper accounting of the billions of dollars of oil and gas produced from public lands.”

Congress authorized a fee system for offshore oil and gas inspections, a program the BLM hopes to duplicate for onshore leases, the agency said.